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CHAPTER I NATURE, FORM AND KINDS OF AGENCY

Agency: a person binds himself to render some service or to do
something in representation or on behalf of another, with consent or
authority of the latter
Essential Characteristics of Agency
1. nominate
2. preparatory contract
3. for representation
4. fiduciary in nature
5. essentially revocable
6. consensual
Commercial Broker
1. a middleman
2. acting in his own name
3. acts as agent for both seller & buyer to effect a sale
between them

Acceptance of Agency Between Persons Who are ABSENT

GR: Silence of agent doest not imply acceptance of agent
Exceptions:
1. principal transmits power of attorney by letter/telegram to
agent who receives it w/o objection from agent
2. principal transmits power of attorney by letter/telegram w/
respect to business where agent is habitually engaged
Effects of Special Notification or Public Advertisement Re:
Appointment of Agent
1.

2.

Person specially notified

a. the 3rd person name as being given power of
attorney is a duly authorized agent
b. revocation shall not prejudice the specified
persons if they were not given notice thereof
Public advertisement
a. the 3rd person given the power of attorney is a
duly authorized agent to any person
b. notice of revocation in a newspaper of general
circulation is sufficient warning to 3rd persons
agency continues until notice is rescinded in the same
manner in w/c it was given

How Agency May Be Constituted

1. expressly
2. impliedly
a. principals acts
b. silence
c.
inaction
d. failure to repudiate agency knowing someone is
acting in his name

Presumption: Agency is for compensation

GR: An agency may be oral

Exception: when the law requires a specific form

General Agency
All the business of the principal

When Special Powers of Attorney (SPA) are Necessary

1. to make such payments as are not usually considered as
acts of administration
2. to effect novations w/c put an end to obligations already in
existence at the time the agency was constituted
3. to compromise
4. to submit questions to arbitration
5. to renounce the right to appeal from a judgment
6. to waive objections to the venue of an action
7. to abandon a prescription already acquired
8. to waive any obligation gratuitously
9. to enter into any contract by w/c the ownership of an
immovable is transmitted, either gratuitously or for
valuable consideration
10. to make gifts
a. exception 1: customary gifts for charity
b. exception 2: gifts made to employees in the
business managed by the agent
11. to loan or borrow money
12. to lease any real property to another for more than 1 year
13. to bind the principal to render some service w/o
compensation
14. to bind the principal in a contract of partnership
15. to obligate the principal as a guarantor/surety
16. to create/convey real rights over immovable property
17. to accept/repudiate an inheritance
18. to ratify/recognize obligations contracted before the
agency
19. other acts of strict dominion

Agency Couched in General Terms

1. include only acts of administration, even if
a. the principal states he withholds no power
b. states that agent may execute acts he considers
appropriate
c.
principal
authorized
general
&
unlimited
management

Acceptance by Agent
1. express
2. implied
a. agents acts w/c carry out the agency
b. silence/inaction accdg. to circumstances
Acceptance of Agency Between Persons PRESENT: Implied
1. principal delivers his power of attorney to agent
2. agent receives it w/o objection

3.

Special Agency
One or more specific transactions

GR: a SPA is necessary for an agent to borrow money

Exception: When it is urgent & indispensable for the preservation
of the things w/c are under his administration
Construction of Power of Attorney
1. must be strictly construed
2. grants only those powers that are specified
3. agent may neither go beyond nor deviate from the power
of attorney
GR: In order to bind the principal by a mortgage on real property
executed by an agent, it must on its face purport to be made,
signed and sealed in the name of the principal
Violation of Rule: it will bind the agent only
Power
Power to sell
Power to mortgage
Power to compromise

Power EXCLUDED
Power to mortgage
Power to sell
Power to submit to arbitration

GR: Agent Must Act Within Scope of Authority

1. Performance of scope of his authority
a. such act is w/in the terms of the power of
attorney, as written
b. even if the agent has exceeded the limits of his
authority according to an understanding bet. the
agent & principal
2. may perform acts conducive to the accomplishment of the
purpose of the agency
3. agent shall act in accordance w/ instructions of principal
4. absence of instruction - observe the diligence of a good
father of a family

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AGENCY

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Exception: Authority of agent not deemed exceeded if performed

in a manner more advantageous to principal
Effect if Agent Acts Beyond Scope of his Authority
1. Void
a. Agent contracts in the name of the principal
b. He exceeds the scope of his authority

c.

2.

the party w/ whom the agent contracted w/ is

aware of the limits of the powers granted by the
principal
Unenforceable
a. those entered into in the name of another person
b. by one who has been given no authority or legal
representation
c.
or who has acted beyond his authority

Consequences of Agents who Acts in His Own Name

1. principal has no right against 3rd person
2. agent is the one who is directly bound to 3 rd person as if
the transaction were his own
Exception: when the contract involves things belonging to principal

Note: Agent prohibited from buying property entrusted to them for

administration or sale w/o principals consent.
GR: Agent must act in person but may appoint a substitute if not
prohibited
Effect when agent appoints substitute:
1. he is responsible for the acts of the substitute if:
a. he was not given power to appoint
b. he was given such power w/o designating the
person & substitute is notoriously incompetent or
insolvent
2. all acts of substitute appointed against principals
probation are void (as against the principal)
GR: the responsibility of 2 or more agents, even though they have
been appointed simultaneously, is not solidary
Exception: if solidarity has been expressly stipulated

CHAPTER II OBLIGATIONS OF THE AGENT

GR: When 2 or More Agents Solidarily Bound:

1. each agent is responsible for non-fulfillment of the agency
2. each agent is responsible for the fault/negligence of his
fellow agents
a. Exception: when the fellow agent acted beyond
the scope of their authority

GR: Agent should carry out agency in accordance w/ instruction of

principal
Exception: Agent should not carry out agency if execution would
manifestly result in loss or damage to principal

Agent is responsible for Interest

1. on sums applied to his own use, from the time he used
them
2. on duns owing the principal, from the time the agency is
extinguished

ACTS OF AN
AGENT
ACCEPTS
agency
DECLINES
agency
WITHDRAWS
agency

ADVANCE
FUNDS

RENDER AN
ACCOUNT

CONSEQUENCES
- bound to carry out the agency
- otherwise he will be liable for damages
- he must finish business already begun upon
death of principal should deal entail any danger
if goods are forwarded to him: observe diligence
of a good father of a family in custody &
preservation of goods until a new agent is
appointed
he must continue to act until principal takes
necessary steps to meet situation
GR: If stipulated, agent is bound to advance
funds necessary for the execution of agency
Exception: When the principal is insolvent
Obligation of Principal: reimburse agent (w/
interest from the day the advanced money) even
if the business or undertaking was not successful,
provided the agent is free from fault
1. must render account to principal
2. must deliver to principal whatever is received
by virtue of the agency (even though not
owing to the principal)
3. this obligation arises & becomes demandable
at agencys end

4.

stipulation exempting agent from obligation to

render accounting is void

GR: Agent is not bound to 3rd party

1. the agent acquires no rights whatsoever, nor does he incur
any liabilities arising from the said contract between his
principal & another party
2. principal is the one bound
3. the principal is liable for the acts of his agent performed
w/in the limits of his authority & such is equivalent to the
performance by the principal himself
Exceptions:
1. he expressly binds himself
2. he exceeds the limits of his authority w/o giving notice of
limited powers
Note: Only the parties, as well as the 3 rd person who transacts w/
the parties themselves, may question the validity of the agency or
the violation of the terms & conditions found therein.
Effects of Unratified Acts Done by Agent
in Excess of His Authority
Art.
1403

Unenforceable

Art.
1898

Void

If agent is empowered to BORROW money he MAY be the lender

at current interest
If agent is empowered to LEND money he CANNOT borrow w/o
principals consent
Note: Agent liable to principal in damages where in case of conflict
of interests, agent preferred his own.

Art.
1900

Valid

1.

those entered into in the name of another

person by one who:

a.

has been given no authority or legal

representation
b. has acted beyond his power
1. the agent contracts in the name of the
principal
2. agent exceeds the scope of his authority
3. the principal does not ratify the contract,
4. the 3rd party is aware of the limits of the
powers granted by the principal
so far as 3rd persons are concerned, an act is
deemed to have been performed w/in the
scope of the agents authority if:
1. such act is w/in the terms of the written
power of attorney
2. even if the agent has exceeded the limits
of his authority
3. according to an understanding between

SIENNA A. FLORES
AGENCY

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the principal and the agent

3 person cannot set up the fact that the agent exceeded his
powers if the principal has:
1. Ratified the agents acts
2. Signified his willingness to ratify agents act
rd

Note: Principal should be the one to question agents lack/excess of

authority
3rd Persons Must Exercise Diligence
1. a person dealing w/ a known agent is not authorized to
blindly trust the agents statements as to the extent of his
powers
2. such person must not act negligently but must use
reasonable diligence & prudence to ascertain whether the
agents act w/in the scope of his authority
3. may require the presentation of the power of attorney
4. private/secret orders & instructions of the principal do not
prejudice 3rd persons who have relied upon the power of
attorney or instructions shown them
GR: commission agent shall be responsible for the good received
according to the terms & conditions & as described in the
consignment
Exception: when he makes a written statement of damage &
deterioration
Obligation of Commission Agents Handling Various Goods of
the Same Kind & Mark for Different Owners
1. distinguish them by countermarks
2. designate the merchandise specifically belonging to each
principal
3. purpose: to prevent conflict of interest among owners
GR: Commission agent cannot sell on credit w/o principals consent
Effect of violation:
1. its considered cash sales
2. principal may demand from him payment in cash
3. but the commission agent shall be entitled to any interest
or benefit w/c may result from such sale
Obligation of Commission Agent Who Sells on Credit w/
Authority of Principal
1. agent shall inform principal the name of buyers
2. Effect of Non-Compliance: sale is deemed a cash sale
insofar as the principal is concerned
Effect of Agents Receiving Guaranty or Del Credere
Commissions
1. he shall bear the risk of collection
2. he shall pay the principal the proceeds of sale on same
terms agreed w/ purchaser
GR: Commission agent is liable for damages when he fails to collect
principals credit that is due & demandable
Exception: when due diligence is proven
Agent Liable for Fraud and Negligence
1. this shall be judged by the courts
2. according to w/n the agency was for a compensation
CHAPTER III OBLIGATIONS OF THE PRINCIPAL
Binding Effect on Principal of Contracts Made by Agent
1. Made w/in scope of authority he must comply w/ all the
obligations w/c the agent may have contracted
2. Made Outside Scope of Authority principal not bound
a. Exception:
i.
he ratifies it expressly/impliedly
ii.
he allows the agent to act as though he had
full powers

GR: obligations are presumed to be joint

Exception: principal is solidarily liable w/ agent for acts in excess
of latters authority where principal allowed agent to act as though
agent had full powers
Agency By Estoppel: Requisites
1. principal manifested a representation of the agents
authority or knowingly allowed the agent to assume such
authority
2. 3rd person, in good faith, relied upon such representation
3. replying upon such representation, such 3rd person has
changed his position to his detriment
GR: the fact or extent of authority of the agents may not be
established from the declarations of the agents alone
However: if one professes to act as agent for another, he may be
estopped to deny her agency as both against the asserted principal
and the 3rd persons interested in the transaction in w/c he or she is
engaged
When must the principal advance sums necessary for the
execution of the agency? when requested by the agent
Obligation of Principal When Agent Advances Funds
1. principal must reimburse agent for the sums advanced
2. includes interest from the day on w/c the advance was
made
3. even if the business/undertaking was not successful
Note: Agent must be free from fault
GR: principal must indemnify the agent for all the damages w/c the
executive of the agency may have caused the latter
Note: Agent must be free from fault or negligence
GR: agent is bound to deliver to principal everything he received
even if not due the principal
Exception: Agent may retain object of agency in pledge until:
1. principal effects the reimbursement for sums advanced
2. principal pays the indemnity for damages
Obligation of 2 or More Principals to Agent for Common
Transaction solidarily liable because of their common interest
Right of Persons who Contracted for Same Thing, One w/
Principal, One w/ Agent
1. that of prior date shall be preferred
2. If a double sale Art. 1544 governs
Rules under Art. 1544
1. Movable Property ownership belongs to the person who
may have 1st taken possession thereof in good faith
2. Immovable Property ownership shall belong to the
person acquiring it who in good faith 1 st recorded it in the
Registry of Property
3. No Inspcription ownership shall pertain to the person
who in good faith was 1 st in possession, and in the
absence thereof the person who presents the oldest title
Liability of Principal & Agent to 3rd Person whose Contract
Must be Rejected
1. if agent is in good faith principal is liable
2. if agent is in bad faith agent alone is liable
Principal not Liable to Agent for Expenses Incurred When:
1. agent acted in contravention of the principals instructions
2. expenses were due to the fault of the agent
3. agent incurred them w/ knowledge that an unfavourable
result would ensue, if the principal was not aware thereof
4. stipulation that the expenses would be borne by the agent
5. stipulation that agent would be allowed only a certain sum

CHAPTER IV MODES OF EXTINGUISHMENT OF AGENCY

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AGENCY

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Modes of Extinguishment of Agency:

1. revocation
2. withdrawal of agent
3. death, civil interdiction, insanity, insolvency of principal or
agent
4. dissolution of the firm/corporation w/c entrusted or
accepted the agency
5. accomplishment of the object/purpose of the agency
6. expiration of the period for w/c the agency was constituted
Principal May Revoke Agency at Will
1. expressly
2. impliedly
Implied Revocation
1. appointment of a new agent for the same business or
transaction revokes the previous agency from the day on
w/c notice thereof was given to the former agent
2. if the principal directly manages the business entrusted to
the agent, dealing directly w/ 3rd persons
3. a general power of attorney is revoked by a special one
granted to another agent, as regards the special matter
involved in the latter
Revocation of Agency
to Deal w/ Specified
3rd Persons
Revocation of Agency
Effective Against 3rd
Persons Not Specified

Revocation shall not prejudice the

specified persons until notice is given to
them
Revocation shall not prejudice the 3rd
persons who deal w/ the agent in good
faith & w/o knowledge of revocation.
Notice of revocation in a newspaper of
general circulation is sufficient warning.

Right of Either (2 or more) Principal/s to Revoke, W/o

Consent of Other the Authority of Agent Appointed for
Common Transaction
1. any of the principals can revoke the authority of their
common agent
2. the obligation of 2 or more principals to common agent is
solidary
Cases of Irrevocable Agencies
1. a bilateral contract depends on it
2. a means of fulfilling an obligation already contracted
3. an unjustified removal of managing partner
Rights of Agent to Withdraw/Resign from Agency
1. by giving due notice to principal
2. agent to indemnify principal should he suffer any damage
a. Exception: withdrawal is due to impossibility of
continuing agency w/o grave detriment to agent
GR: The agent may not claim damages arising from the revocation
of the agency by the principal.
Exception: if such revocation was done in order to evade payment
of agents commission.
Obligation of Agent to Continue to Act Even After
Withdrawing From Agency
1. even if the agent withdraws from the agency for a valid
reason, he must continue to act
2. until principal has had reasonable opportunity to take
necessary steps to meet situation
GR: death of principal extinguishes agency
Exceptions:
1. if it was constituted for the common interest of principal &
agent
2. if it was constituted in favour of a 3 rd person who accepted
stipulation in his favour
An Act done by the Agent After Death of his Principal is Valid
& Effective if:
1. agent doesnt know of death or other cause of
extinguishment of agency

2.

3rd person dealing w/ agent must also be in good faith (not

aware of death or other cause)

Obligations of Agents Heirs in Case of Agents Death

1. notify principal
2. adopt measures as circumstances demand in principals
interest
Note: if principal dies, the law is silent on whether his heirs have
any obligation to notify the agent

CASE DOCTRINES
CHAPTER I: NATURE, FORM AND KINDS OF AGENCY
EUROTECH INDUSTRIAL TECHONOLOGIES INC. VS. CUIZON

Article 1897 provides that an agent, who acts as such, is

not personally liable to the party w/ whom he contracts.
The same provision provides 2 instances when an agent
becomes personally liable to a 3rd person:
o
When he expressly binds himself to a 3rd person
o
When he exceeds his authority

The Deed of Assignment clearly states that Edwin signed

thereon as the sales manager. The position of manager
presupposes the grant of broad powers w/ w/c to conduct
the business of the principal.

Edwin acted well w/in his authority when he signed the

Deed of Assignment. His participation was reasonably
necessary or was required in order for him to protect the
business of his principal.

An agent acting w/in his authority as such, who didnt

acquire any right nor incur any liability arising from a
Deed, is not a real party in interest who should be
impleaded. A real party in interest is one who stands to be
benefited or injured by the judgment in the suit, or the
party entitled to the avails of the suit.
VICTORIAS MILLING CO. VS. CA

One factor which is most clearly distinguishes agency from

other legal concepts is control.

An authorization given to another containing the phrase

for and in our behalf does not necessarily establish an
agency. What is decisive is the intention of the parties,
and the use of the words, sold and endorsed means that
the arties intended a contract of sale, and not an agency.
REPUBLIC VS. EVANGELISTA

General Rule: A contract of agency is revocable as it is a

personal contract of representation based on trust &
confidence reposed by the principal on his agent. As the
power of the agent to act depends on the will and license
of the principal he represents, the power of the agent
ceases when the will or permission is withdrawn by the
principal. Thus, generally the agency may be revoked by
the principal at will.

Exception: When the contract of agency is coupled with

interest (e.g. if a bilateral contract depends on an
agency)The reason for its irrevocability is because the
agency becomes part of another obligation. It is solely not
just the rights of the principal but also that of the agent
and 3rd persons which are affected. In such cases, the
agency cannot be revoked at the sole will of the principal.
UY VS. CA

An agent of the seller is not a party to the contract of sale

bet. his principal and the buyer. Since a contract may be
violated only by the parties thereto as against each other,
the real-parties-in-interest in an action upon that contract
must generally be parties to said contract.

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AGENCY

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An agent, in his own behalf, may bring an action founded

on a contract made for his principal, as an assignee of
such contract.
Where the action is brought by an attorney-in-fact of a
landowner in his name, and not in the name of the
principal, the action was properly dismissed.
An agent entitled to receive a commission from his
principal upon performance of a contract w/c he made on
his principals account does not have any claim against the
other party for breach of contract.

BORDADOR VS. LUZ

There is no showing that Luz consented to the acts of

Narciso or authorized him to act on her behalf, much less
with respect to the particular transactions involved.

It was grossly and inexcusably negligent of the spouses to

entrust to Narciso, several pieces of jewelry substantial
value without requiring a written authorization form his
alleged principal. A person dealing with an agent is put
upon inquiry and must discover the peril the authority of
the agent.
HAHN VS. CA

An agent receives a commission upon the successful

conclusion of a sale, while a broker earns his pay merely
by bringing the buyer and the seller together, even if no
sale is eventually made.

The fact that a person invested his own money to put

service centers and showrooms does not necessarily prove
that he is not an agent of the car manufacturer.

Hahn was clearly the agent of BMW. BMW exercised

control over Hahns activities as a dealer to enforce
compliance & specifications. Hahn receives commissions
upon the successful conclusions of a sale. In fact, BMW
announced in the Asian Region that Hang was the official
BMW agent.
CHEMPHIL VS. CA

Where the money used to discharge a persons debt

rightfully belonged to the debtor, the party paying cannot
be considered a 3rd party payor under Art. 1302(2) of the
NCC but a mere agent.

When FCI issued the check to SBTC to pay Garcias

indebtedness to the bank, it was in effect paying w/
Garcias money, no longer w/ its own, because said
amount was part of the purchase price w/c FCI owed
Garcia in payment of the sale of the disputed shares. The
money paid by FCI to SBTC, thus properly belonged to
Garcia. It is as if Garcia himself paid his own debt to SBTC,
but through a 3rd person.

The notice of garnishment was served upon the Presidents

secretary. One of her duties is to receive letters and
notices for and in behalf of her superior. The secretary of
the president may be considered an agent of the
corporation. Service of summons on him is binding on the
corporation.
ORIENT AIR SERVICES VS. CA

An agent-principal relationship can only be effected w/ the

consent of the principal, and must not, in any way be
compelled by law or by any court.
AIR FRANCE VS. CA

Notice to travel agent of rejection of request for extension

of validity of plane tickets is also a notice to the principals.
TAN VS. GULLAS

A broker is one whose job is to bring together prospective

buyers and sellers, never acting in his own name but only
as a middleman. Unlike agents, who receive commission
upon completion of the sale, brokers receive payment as
soon as they are able to bring the buyer and seller
together.

LINTONJUA VS. ETERNIT CORP.

The general principles of agency govern the relation

between the corporation and its officers or agents, subject
to the articles of incorporation, by-laws, or relevant
provisions of law.

The property of a corporation, however, is not the property

of the stockholders or members, and as such, may not be
sold w/o express authority from the board of directors.

Any sale of real property of a corporation by a person

purporting to be an agent thereof but w/o written
authority from the corporation is null & void.
Cochingyan: Differentiate from Rural Bank case & PNB case. Here,
the land couldnt be sold w/o written authority from the board of
directors. The land involved was a major corporate asset of the
company practically everything it owned in the Philippines.
CONDE VS. CA

Implied agency is created from silence or lack of action or

failure to repudiate the agency.

If, as alleged, petitioner exerted no effort to procure the

signature of Pio Altera after he had recovered from his
illness, neither did the respondents repudiate the deed
that their son-in-law signed. Thus, an implied agency must
have been created from their silence or lack of action, or
their failure to repudiate the agency.
EQUITABLE PCI-BANK VS. KU

An agency may be express but it may also be implied from

the acts of the principal, from his silence, or lack of action,
or his failure to repudiate the agency, knowing that
another person is acting on his behalf without authority.

Likewise, acceptance by the agent may also be express,

although it may also be implied from his acts which carry
out the agency, or from his silence or inaction according to
the circumstances.

Rosales stated in his affidavit that he is not the

constituted agent of Curato Divina Mabilog Nedo Magturo
Pagaduan Law Office." However, he also testified that "on
occasions when I receive mail matters for said law office,
it is only to help them receive their letters promptly,"
implying that counsel had allowed the practice of Rosales
receiving mail in behalf of the former. There is no showing
that counsel had objected to this practice or took steps to
put a stop to it.
RALLOS VS. YANGCO

Yangco, having advertised the fact that Collantes was his

agent, having given special notice to Rallos of the agency
and having also given them a special invitation to deal w/
such agent, it became Yangcos duty, upon termination of
the relationship of principal & agent, to give due & timely
notice thereof to Rallos. Failure to do so will hold him liable
to 3rd parties acting in good faith and properly relying upon
such agency.
PINEDA VS. CA

A special power of attorney is necessary to enter into any

contract by w/c the ownership of an immovable is
transmitted or acquired for a valuable consideration.
CITY LITE REALTY INC. VS CA

Private respondent was only to assist in petitioner in

looking for buyers and referring to them possible
prospects whom they were supposed to endorse to
petitioner. the final evaluation, appraisal, and acceptance
of the transaction could be made only by petitioner.
Respondent was only a contact person (a mere broker) w/
no authority to conclude the sale of the property.
RAET VS. CA

In a sale of parcel of land or any interest therein made

through an agent, a SPA is essential. This authority must
be in writing, otherwise the sale is void.

SIENNA A. FLORES
AGENCY

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If a buyer and a developer had indeed entered into a

contract involving a subdivision lot, it is rather strange
that a contract of such importance has not been reduced
to writing.

COSMIC LUMBER VS. CA

When an agent is engaged in the perpetration of a fraud

upon his principal for his own exclusive benefit, he is not
really acting for the principal but is really acting for
himself, entirely outside the scope of his agency.

The basic tenets of agency rest on the highest

considerations of justice, equity & fair play, and an agent
will not be permitted to pervert his authority to his own
personal advantage.

For the principal to confer the right upon an agent to sell

real estate, a power of attorney must so express the
powers of the agent in clear and unmistakable language.
LIM VS. CA

The fact that the accuseds signature appears on the upper

portion of the receipt doesnt have the effect of altering
the terms of the transaction from a contract of agency to
sell on commission basis to a contract of sale.
RURAL BANK OF BOMBON VS. CA

An agent who signs a Deed of Mortgage in his name does

not alone validly bind owner of mortgaged estate.

In the execution of the DREM, Aquino named himself as

the mortgagor w/o stating that his signature on the deed
was for and in behalf of Gallardo in his capacity as her
attorney-in-fact.

Also, Aquinos wife has not been appointed co-agent of

Aquino, and her signature on the deed can only mean that
the obligation was personally incurred by them and for
their own personal account.

There is no principle of law by w/c a person can become

liable on a real estate mortgage w/c she never executed
either in person or by attorney in fact.
HOME INSURANCE CO. VS US LINES

Authority to compromise cannot lightly be presumed.

The Rules of Court require, for attorneys to compromise

the litigation of their clients, a special authority. While it
is not stated that the special authority be in writing, the
court has every reason to expect that, if not in writing, the
same be duly established by evidence other than the selfserving assertion of the counsel himself that such
authority was verbally given to him.
INLAND REALTY VS. CA

Where a party is not the efficient procuring cause in

bringing about a sale, he is not entitled to the stipulated
brokers commission.
MANOTOK BROS. INC. VS. CA

When there is a close, proximate and causal connection

between the agents efforts and labor and the principals
sale of property, the agent is entitled to a commission.

Private respondent, as efficient procuring cause in bringing

about the sale, is entitled to the commission.
DOMINION INSURANCE VS. CA

Even though the contact entered into contained the word

special, the contents of the document was actually a
general agency.

A general power permits the agent to do all acts for which

the law does not require a special power, and the contents
in the document did not require a special power of
attorney.

Guevarra was instructed that the payment for the insured

must come from the revolving fund or collection in his
possession. Hence, he should not have paid the insured

through his own capacity. Under Art. 1918 of the NCC, if

an agent acted in contravention of the principals
instruction, the principal will not be liable for the expenses
incurred by the agent.
However, under Art. 1236 (payment by a 3rd person),
Guevarra must be reimbursed but only to the extent that
Dominion has benefited.

LINTONJUA VS. FERNANDEZ

The declaration of the agent alone (i.e. letter sent by

Fernandez to Litonjua) are generally insufficient to
establish the fact or extent of her authority. Moreover, the
letter signed by Fernandez alone, w/o authority from the
owners, is not binding on the latter, unless they ratify it.
SHOPPERS PARADISE REALTY VS. ROQUE

The lease of property for more than 1 year is considered

not merely an act of administration but an act of strict
dominion or of ownership. A SPC is thus necessary for its
execution through an agent.
VELOSO VS. CA

A notarized power of attorney carries w/ it evidentiary

weight conferred upon it w/ respect to its due execution

Whether the instrument be denominated as general

power of attorney, or special power of attorney, what
matters is the extent of the power or powers contemplated
upon the agent or attorney-in-fact.

Where the general power of attorney expressly authorizes

the agent the power to sell, there is no need to execute a
separate and special power of attorney.
VDA. DE CHUA VS. IAC

Where the contract entered into by an agent is for more

than 1 year, the agent must be armed w/ a special power
of attorney.
RURAL BANK OF CALOOCAN VS. CA

Bank should require the execution of a power of attorney

in order that 1 may be understood to have granted
another to borrow on behalf of the former.

A bank is required to exercise extreme care and proper

inquiry where a person borrows money and mortgages
another persons property to secure it
SIREDY ENTERPRISE VS. CA

The scope of the agents authority is what appears in the

written terms of the power of attorney.

While 3rd persons are bound to inquire into the extent or

scope of the agents authority, they are not required to go
beyond the terms of the written power of attorney.

A principal is liable for acts of his agents performed w/in

the limits of the latters authority that is equivalent to the
performance by the principal himself
OLAGUER VS. PURAGGANAN AND LOCSIN

A power of attorney must be strictly construed; the

instrument will be held to grant only those powers that are
specified, and the agent may neither go beyond nor
deviate from the power of attorney. However, the rule is
not absolute. If the language will permit, the construction
that should be adopted is that w/c will carry out instead of
defeat the purpose of the appointment.

The limits of an agents authority shall not be considered

exceeded should it have been performed in a manner
more advantageous to the principal than that specified by
him.

The money was being deposited to the bank accounts of

petitioners in-laws, and not to the account of the
petitioner nor his wife, precisely because some of his
property had already been confiscated by the military.
What Locsin did was actually more beneficial for Olaguer.

SIENNA A. FLORES
AGENCY

-7-

BAY VIEW HOTEL VS. KER AND CO.

Since an agent may do such acts as may be conducive to

the accomplishment of the purpose of the agency,
admissions secured by the agent w/in the scope of his
agency ought to favour the principal.

The act or declarations of an agent of the party w/in the

scope of the agency and during its existence are
considered & treated in turn as the declarations, acts and
representations of his principal and may be given in
evidence against such party

A company w/c acted as a mere insurance agent cannot

be held liable for claims arising from the insurance
contract
PHIL BANK OF COMMERCE VS. ARUEGO

Sec. 20 of the NIL: Where the instrument contains or a

person adds to his signature words indicating that he signs
for or on behalf of a principal or in a representative
character, w/o disclosing his principal, does not exempt
him from personal liability.
CHAPTER II: OBLIGATIONS OF THE AGENT
BRITISH AIRWAYS VS. CA

A carriage by plane, although performed by successive

carriers, is regarded as a single operation & that the
carrier issuing the passengers ticket is considered the
principal party & the other carrier merely subcontractors
or agent.

Both PAL and BA are members of the International Air

Transport Association
wherein member airlines are
regarded as agents of each other in the issuance of the
tickets and other matters pertaining to their relationship.

An agent is responsible for any negligence in the

performance of its function and is liable for damages w/c
the principal may suffer by reason of its negligence.

A third party complaint is a procedural device whereby a

third party who is neither a party nor a privy to the act or
deed complained of by the plaintiff, may be brought into
the case w/ leave of court, by the defendant who acts as a
third party plaintiff to enforce against such third-party
defendant a right for contribution, indemnity, subrogation
or any other relief in respect of the plaintiffs complaint.
BA FINANCE VS. CA

BA Finance was deemed subrogated to the rights &

obligations of Supercars when the latter assigned the
promissory note, together w/ the chattel mortgage
constituted on the car in favor of BA Finance. BA Finance
is therefore bound by the terms and conditions of the
chattel mortgage executed between the Cuadys and
Supercars.

Under the deed of chattel mortgage, BA Finance acted as

an attorney-in-fact w/ full power & authority to file, followup, compromise and or settle insurance claims. It was
authorized to sign, execute and deliver the corresponding
papers, receipts & documents to the Insurance company
as may be necessary to prove the claim & to collect from
the latter the proceeds of insurance to the extent of its
interests.

In granting BA finance such powers, there existed an

agency. Under Art. 1884 of the CC, an agent is bound by
its acceptance to carry out the agency & is liable for
damages w/c through its non-performance, the principal
may suffer.
CHUA-BURCE VS. CA

When the money, goods, or any other personal property is

received by the offender from the offended party through
trust, or on commission, or for administration, the
offender acquires both material or physical possession and
juridical possession of the thing. Juridical possession

means a possession which gives the transferee a right

over the thing which the transferee may set up even
against the owner.
DOMINGO VS. DOMINGA

The agent has an absolute obligation to make a full

disclosure or complete account to his principal of all his
transactions & other material facts relevant to the agency.
The law does not countenance any stipulation exempting
the agent from such an obligation and considers such an
exemption as void. (Note: such duty does not apply if the
agent or broker merely acted as a middleman w/ the task
of merely bringing together the vendor and vendee, who
themselves will negotiate on the terms and conditions of
the transaction.)

An agent who takes a secret profit, w/o revealing it to the

principal, is guilty of breach of his loyalty to the principal
and forfeits his right to collect commission.
GUZMAN VS. CA

Payment by a 3rd person to a teller is payment to the bank

itself; the teller is a mere custodian or keeper of the funds
received, and has not independent right or title to retain
or possess the same as against the bank. On the other
hand, an agent can even assert, as against his own
principal, an independent, autonomous, right to retain the
money or goods received in consequence of the agency
(e.g. when the principal fails to reimburse him for
advances he has made, and indemnify him for damages
suffered w/o his fault.)
ESCUETA VS. LIM

A contract executed by an agent w/o the authority to sell

is not void but simply unenforceable.

The acceptance and enchashment by the owner of a check

representing the purchase price of his property sold
through his agent constitute ratification of the contract of
sale & produce the effects of an express power of agency.
SERONA VS. CA

An agent is not prohibited to appoint a substitute so long

as the principal did not expressly prohibit him from doing
so. The agent will be responsible for the actions of his
substitute.

An agent does not ipso facto commit the crime of estafa

through conversion or misappropriation by delivering
jewelry she received to be sold on commission basis to a
sub-agent the law on agency allows the appointment by
an agent of a substitute or sub-agent in the absence of an
express agreement to the contrary between the agent &
the principal
ANGELES VS. PNR

Where agency exists, the 3 rd partys liability on a contract

is to the principal and not to the agent and the
relationship of the third party to the principal is the same
as that in a contract in which there is no agent.

General Rule: The agent has neither rights nor liabilities as

against the 3rd party; he cannot thus sue or be sued on
the contract.

Exception: Where an agent is constituted as an assignee,

the agent may, him his own behalf, sue on a contract
made for his principal, as an assignee of such contract.
SMITH BELL VS. CA

A settling agent acting within the scope of its authority,

cannot be held personally and/or solidarily liable for the
obligations of its disclosed principal merely because there
is allegedly a need for a speedy settlement of the claim of
private respondent.

A resident agent, as a representative of the foreign

insurance company, is tasked only to receive legal

SIENNA A. FLORES
AGENCY

-8-

processes on behalf of its principal and not to answer

personally for any insurance claims.
DBP VS. CA

If the 3rd person dealing w/ an agent is unaware of the

limits of the authority conferred by the principal on the
agent and the 3rd person has been deceived by the nondisclosure by the agent, then the latter is liable for him for
damages to him.

DBP is not authorized to accept applications for MRI when

its clients are more than 60 years of age. Knowing all the
while that Dans was ineligible for MRI coverage because of
his advanced age, DBP exceeded the scope of its authority
when it accepted Danss application for MRI by collecting
the insurance premium, and deducting its agents
commission and service fee.
PINEDA VS. CA

In group insurance policies, the employer is the agent of

the insurer
BORJA VS. SULYAP

Even if the partys consent exceeded his authority in

inserting a penalty clause in the compromise agreement,
the status of said clause is not void, but merely voidable &
is capable of being ratified.

Petitioners failure to question the inclusion of the penalty

clause in the judicial compromise despite several
opportunities to do so was tantamount to ratification
SAFIC ALCAN VS. IMPERIAL VEGETABLE

The acts of an agent beyond the scope of his authority do

not bind the principal unless the latter ratifies the same
expressly or impliedly.

Monteverde had no blanket authority to bind IVO to any

contract. He must act according to the instructions of the
Board of Directors. Even in instances when he was
authorized to act according to his discretion -- that
discretion must not conflict with prior Board orders,
resolutions and instructions.
CERVANTES VS. CA

When the 3rd person knows that the agent was acting
beyond his power or authority, the principal can not be
held liable for the acts of the agent. If the said 3 rd person
is aware of such limits of authority, he is to blame, and is
not entitled to recover damages from the agent, unless
the latter undertook to secure the principal's ratification.

The admission by Cervantes that he was told by PALs legal

counsel that he had to submit a letter requesting for an
extension of the validity of subject tickets was tantamount
to knowledge on his part that the PAL employees had no
authority to extend the validity of subject tickets & only
PALs legal counsel was authorized to do so
CASON VS. RICHARDS

When money is received as a deposit by an agent, and

that money is by the agent turned over to his principal,
with notice that it is the money of the depositor, the
principal is bound to deliver it to the depositor, even if his
agent was not authorized to receive such deposits
YU ENG CHO VS. PANAM

The affidavit of a person agent where she stated that she

is an authorized agent of a particular principal has weak
probative value in light of her testimony in court to the
contrary. Affidavits are almost always incomplete and
often inaccurate they are considered inferior to a
testimony given in court
BACALTOS COAL MINES VS. CA

The Authorization is a SPA for it refers to a clear mandate

specifically authorizing the performance of a specific power
and of express acts subsumed therein

A check should be drawn in favour of the principal, and not

the agent

TOYOTA SHAW VS. CA

The document, Agreements Between Mr. Sosa and

Popong Bernardo of Toyota Shaw, Inc. shows the absence
of a meeting of minds between Toyota and Sosa. Sosa did
not even sign it. Sosa was well aware from its title that he
is not dealing w/ Toyota but w/ Bernardo, and that the
latter didnt misrepresent that he had the authority to sell
any Toyota vehicle.

He knew that Bernardo was only a sales representative of

Toyota and hence a mere agent of the latter. It was
incumbent upon Sosa to act w/ ordinary prudence and
reasonable diligence to know the extent of Bernardos
authority as an agent in respect of contracts to sell
Toyotas vehicles. A person dealing w/ an agent is put
upon inquiry and must discover upon his peril the
authority of the agent.
EUGENIO VS. CA

As far as 3rd persons are concerned, an act is deemed to

have been performed w/in the scope of the agents
authority, if such is w/in the terms of the power of
attorney, as written, even if the agent has in fact
exceeded the limits of his authority according the
understanding between the principal and his agent.

Payment shall be made to the person in whose favour the

obligation has been constituted, or his successors-ininterest or any person authorized to receive it.
COMMISSIONER VS. SAN DIEGO

A 3rd person cannot question lack of authority of an agent.

Such lack of authority may be questioned only the
principal.
GREEN VALLEY VS. IAC

In an agency to sell, the agent is liable to pay the principal

for goods sold by the agent w/o the principal consent.

The commission agent cannot, w/o express or implied

consent of the principal, sell on credit. Should he do so,
the principal may demand from him payment in cash, but
the commission agent shall be entitled to any interest or
benefit, w/c may result from such sale.
METROBANK VS. CA

An agent is responsible not only for fraud but also for

negligence, w/c shall be judged w/ more or less rigor by
the courts, according to whether or not the agency was or
was not for compensation.

The negligence of Metrobank has been well-established. It

was the clearance given by it that assured Golden Savings
that it was already safe to allow Gomez to withdraw the
proceeds of the treasury warrants he had deposited.
CHAPTER III: OBLIGATIONS OF THE PRINCIPAL
RURAL BANK OF MILAOR V. OCFEMIA

The bank acknowledged, by its own acts or failure to act,

the authority of the manager to enter into binding
contracts. If the bank management believed that it had
title to the property, it should have taken some measures
to prevent the infringement or invasion of its title thereto
& possession thereof

The manager had previously transacted business on behalf

of the bank & the latter had acknowledged her authority. A
bank is liable to innocent third persons where
representation is made in the course of its normal
business by an agent, even though such agent is abusing
her authority. Persons dealing w/ the agent could not be
blamed for believing that she was authorized to transact
business for & on behalf of the bank.

SIENNA A. FLORES
AGENCY

-9-

Authority to act for & bind a corporation may be presumed

from the acts of recognition in other instances where the
power was in fact exercised. The managers authority to
represent the corporation may be implied from the manner
in w/c he was been permitted by the directors to manage
its business.

When a corporation knowingly permits one of its officers

or agents to do acts w/in the scope of an apparent
authority, & thus holds him out to the public as possessing
power to do those acts, the government will be estopped
from denying this authority to anyone who has in good
faith dealt w/ the corporation.
Cochingyan: The courts ruling took equity into consideration.
Differentiate from Lintonjua case.
PLEASANTVILLE DEVELOPMENT CORP. V. CA

The principal is responsible for the acts of the agent, done

w/in the scope of his authority, & should bear the damage
caused to third persons. On the other hand, the agent who
exceeds his authority is personally liable for the damage.

The agent in the case at bar was acting w/in its authority
as the sole real estate representative of petitioner when it
made the delivery to Kee. In acting within its scope of
authority, it was, however, negligent. It is this negligence
that is the basis of principals liability.
LIMKETKI SONS V. CA

Records show that the authority to buy and sell was

withdrawn from the Trust Officer. If such Officer did not
have any authority to act as alleged, there was no need to
withdraw authority which he never possessed.

If BPI could give the authority to sell to a licensed broker,

there is no reason to doubt the authority to sell of the 2
BPI Vice Presidents whose precise job in the Bank was to
manage & administer real estate property.
CUISON V. CA

One who clothes another w/ apparent authority as his

agent & holds him out as such cannot be permitted to
deny the authority of such person to act as his agent, to
the prejudice of innocent third parties dealing w/ such
person in good faith & in the honest belief that he is what
he appears to be.

It matters not whether the representations are intentional

or merely negligent so long as innocent third persons
relied upon such representations in good faith.

Even if the agent exceeded his authority, the principal is

solidarily liable w/ the agent for the transaction if the
former allowed the latter to act as though he had powers.
BEDIA V. WHITE

If White had any doubt about the capacity in w/c Bedia

was acting, what have should have dont was verify the
matter w/ Hontiveros (the principal)

The principal must comply w/ all the obligations w/c the

agent may have contracted w/in the scope of his authority.
Hence, White cannot now hold Bedia liable for the acts
performed by her for, & imputable to Hontiveros, as her
principal.

White moved for the dismissal of the complaint against

Hontiveros, leaving Bedia as the sole defendant.
Hontiveros had admitted as early as when it filed it answer
that Bedia was acting as its agent. The effect of the
motion was to leave the plaintiffs w/o cause of action
against Bedia for the obligation, if any, of Hontiveros.
PNB V. CA

After 10 years of negotiations Perez was made to believe

that he can redeem his property only to realize that the
bank sold it to De Castro. Perez validly relied on the
assurance of the bank manager that he will redeem the
property after full payment.

A private corporation which intentionally or negligently

clothes its officers or agents with apparent power to

perform acts for it the corporation is ESTOPPED to deny

such authority as to innocent third person dealing in good
faith.
Cochingyan: The courts ruling took equity into consideration.
Differentiate from Lintonjua case.
PNB V. BAGAMASPAD

Even though they were mere agents, they are still liable if
they acted beyond their authority.

Defendants were negligent and extremely lax & careless in

granting loans. So negligent that it acted to the detriment
of its principal. They did not follow the procedure handed
by the PNB in granting loans.

The general rule is that a principal who collects a loan

made by agents without authority, ratifies the actions of
the agents. However it is not applicable to the present
case because there was no intention by the PNB to ratify
contracts. Its only intention in collecting from the
borrowers is to lessen the liability of defendants & diminish
as much as possible the loss to itself.

It is not necessary for the bank to exhaust all legal

possibility against borrowers before it goes after
defendants because the defendants must be held liable for
its illegal actions.
DOLES V. ANGELES

Agency may even be implied from the words and conduct

of the parties and the circumstances of the particular case.
Though the fact or extent of authority of the agents may
not, as a general rule, be established from the
declarations of the agents, she may be estopped to deny
her agency both as against the asserted principal and the
third persons interested in the transaction in which he or
she is engaged.

It is not necessary in an agency to that the principal

personally encounter the third person with whom the
agent interacts. It is actually the purpose of the law that
an agency extend the personality through the facility of
the agent.

If the principals do not actually & personally know each

their, such ignorance does not affect their juridical
standing as agents.

The manner in which the parties designate the relationship

is not controlling.
Cochingyan: This case was an agent vs. agent -- no case!!!
LUSTAN V. CA

A SPA is a continuing authority and absent a valid

revocation duly furnished to the mortgage, the same
continues to have force and effect as against third persons
who had no knowledge of such lack of authority.

Unless revoked and known to other parties the SPA will

still be binding between 3 rd person in good faith and
principal.
VERZOSA V. LIM

Both the owner and the agent should be declared jointly &
severally liable, since the obligation w/c is the subject of
this action had its origin in a tortuous act & did not arise
from contract.
Cochingyan: Different from Smith Bell case. In the Smith Bell case,
there was a contract and the agent was not liable. In Verzosa, the
agent was liable. However, his liability is not based on a contract,
but from a tortuous act.
ALBALADEJO Y CIA V. PRC

One of the terms under the agreement declared that

during the continuance of the contract, Visayan would not
appoint any other AGENT for the purchase of copra in
Legaspi. But the use of this term in one clause of the
contract cannot dominate the real nature of the
agreement as revealed in other clauses, no less than in
the caption of the agreement itself.

SIENNA A. FLORES
AGENCY

- 10 -

It is clear that in making its purchases from the producers,

Albaladejo was buying upon its own account, & when it
turned over the copra Visayan, pursuant to that
agreement, a 2nd sale was effected The title of all the
copra purchased by Albaladejo remained in it until it was
delivered by way of subsequent sale to Visayan.

DE CASTRO V. CA

Constante appointed Artigo in a handwritten note to sell

the properties of the De Castros. Constante signed the
note as owner & representative of the other co-owners.
Under this note, a contract of agency was clearly
constituted between Constante and Artigo.

The De Castros admit that the other co-owners are

solidarily liable under the contract of agency. The solidary
liability of the 4 co-owners militates against the De
Castros theory that the other co-owners should be
impleaded as indispensable parties. When the law
expressly provides for solidarity of the obligation, as in the
liability of co-principals in a contract of agency, each
obligor may be compelled to pay the entire obligation. The
agent may recover the whole compensation from any 1 of
the co-principals, as in this case. Indeed Art. 1216 of the
NCC provides that a creditor may sue any of the solidary
debtors. Solidarity does not make a solidary obligor an
indispensable party in a suit filed by the creditor.
CHATER IV: MODES OF EXTINGUISHMENT OF AGENCY
LAVINA V. CA

The estate of a dead person may only be summoned

through the executor or administrator of his estate for it is
the executor or administrator who may bring or defend
actions for the recovery or protection of the property or
rights of the deceased.

The GPA appointing Muyot as Carmens agent or attorneyin-fact was extinguished upon Carmens death. Muyot was
bereft of authority to represent Carmen.

Carmens death likewise divested Atty. Lavina of authority

to represent her as counsel. A dead client has no
personality and cannot be represented by an attorney.

The contention that the agency was constituted in the

common interest of the principal and the agent and that
hence it was not extinguished by the death of the principal
is refuted by the instrument itself w/c explicitly provided
that the powers conferred on the agent were to be
exercised for the sole benefit of the principal.
TERRADO V. CA

The contract entered into by a municipality w/ a private

individual for he management of municipal fisheries is
automatically extinguished once the latter (the agent)
dies.

Agency is extinguished by the death of the agent. His

rights & obligations arising from the contract are not
transmissible to his heirs.
RALLOS V. FELIX GO CHAN

An act done by the agent after the death of his principal is

valid & effective only under 2 conditions:
1. that the agent acted w/o knowledge of the death
of the principal
2. that the 3rd person who contracted w/ the agent
himself acted in good faith
Good faith here means that the 3 rd person was not aware
of the death of the principal at the time he contracted w/
said agent. These 2 requisites must concur, and the
absence of 1 will render the act of the agent invalid and
unenforceable.

The NCC does not impose a duty on the heirs to notify the
agent of the death of the principal. What the NCC provides
in Article 1932 is that, if the agent dies, his heirs must

notify the principal thereof, and in the meantime adopt

such measures as the circumstances may demand in the
interest of the latter.
CMS LOGGING V. CA

CMS appointed DRACOR as its agent for the sale of its logs
to Japanese firms. Yet, during the existence of the
contract of agency, DRACOR admitted that CMS sold its
logs directly to several Japanese firms. This act constituted
an implied revocation of the contract of agency.

The principal may revoke a contract of agency at will, and

such revocation may be express, or implied, and may be
availed of even if the period fixed in the contract of agency
as not yet expired.

As the principal has this absolute right to revoke the

agency, the agent can not object thereto; neither may he
claim damages arising from such revocation, unless it is
shown that such was done in order to evade the payment
of agent's commission.
SEVILLA V. CA

The agency being one coupled w/ an interest cannot be

revoked at will. Sevilla is a bona fide travel agent herself,
& as such she acquired an interest in the business
entrusted to her. Her interest is not to the commissions
she earned as a result of her business transactions, but 1
that extends to the very subject matter of the power of
management delegated to her.

For unwarranted revocation of the contract of agency,

TWSI should be sentenced to pay damages.
GARCIA V. DE MANZANO

There is n proof in the record that the 1 st agent knew of

the power of attorney granted to the 2 nd agent. It was
necessary to prove that the 1 st agent had notice of the 2 nd
power of attorney. Not having done so, the 1 st agent was
acting under a valid power-of-attorney w/c had not been
legally revoked on the date of the sale.

The power doesnt expressly state that the agent may sell
the boat, but power so full & complete authorizing the
sale of real property must necessarily carry w/ it the right
to sell a half interest in a small boat.
DY BUNCIO AND CO V. ONG GUAN CA

The making & accepting of a new power of attorney,

whether it enlarges or decreases the power of the agent
under a prior power of attorney, must be held to supplant
and revoke the latter when the 2 are inconsistent. If the
new appointment w/ limited powers doesnt revoke the
general power of attorney, the execution of the 2 nd power
of attorney would be a mere futile gesture.
NATIONAL SUGAR TRADING V. PNB

The agency established between the parties is 1 coupled

w/ interest, w/c cannot be revoked or cancelled at will by
any of the parties.
BACALING V. MUYA

A principal cannot revoke at her whim & pleasure an

irrevocable special power of attorney where the agency is
one coupled w/ interest. The fiduciary relationship
inherent in ordinary contracts of agency is replaced by
material consideration in an agency coupled w/ interest
w/c bars the removal or dismissal of the agent as
attorney-in-fact on the ground of alleged loss of trust and
confidence.

The principal cannot vest in herself just like in ordinary

contracts the unilateral authority of determining the
existence & gravity of the grounds to justify the rescission
of the irrevocable special power of attorney.
PEREZ V. PNB

SIENNA A. FLORES
AGENCY

- 11 -

The power to foreclose is not an ordinary agency that

contemplates exclusively the representation of the
principal by the agent, but is primarily an authority
conferred upon the mortgagee for the latters own
protection. It is an ancillary stipulation supported by the
same cause/consideration for the mortgage and forms an
essential and inseparable part of that bilateral agreement.
That power survives the death of the mortgagor.

COLEONGCO V. CLAPARLOS

The power of attorney can be made irrevocable by

contract only in the sense that the principal may not recall
it at his pleasure; but coupled with interest or not, the
authority certainly can be revoked for just cause, such as
when the attorney-in-fact betrays the interest of the
principal.

The irrevocability of the power of attorney may not be

used to shield the perpetuation of acts in bad faith, breach
of confidence, or betrayal of trust, by the agent for that
would amount to holding that a power coupled with
interest authorizes the agent to commit frauds against the
principal.
DEL ROSARIO V. ABAD

A mere statement in the power of attorney that it is

coupled w/ interest is not enough. In what does such
interest consist must be stated in the power of attorney.

As the agency was not coupled w/ interest, it was

terminated upon the death of the principal, & the agent
could no longer validly convey the land.
PASNO V. RAVINA

The power of sale given in a real estate mortgage is a

power coupled w/ an interest w/c survives the death of the
grantor. The mortgagee w/ a power of sale should, on the
death of the mortgagor, foreclose the mortgage in
accordance w/ the procedure pointed in Sec. 708 of the
Code of Civil Procedure.

SIENNA A. FLORES
AGENCY